The Department for Work and Pensions only approves these deductions in very specific circumstances
Universal Credit and Pension Credit serve as vital financial support for many in the UK. However, the Department for Work and Pensions (DWP) warns that claimants may face cuts worth between 5% and 15% in very exceptional circumstances.
These reductions, known as ‘third-party deductions’, occur when a benefits recipient has outstanding debts such as court fines, rent, Council Tax, or energy bills. Typically, these are made at a fixed rate until the debt is cleared, with a cap of three concurrent debts being repaid through this process.
For those on Universal Credit, each debt incurs a 5% deduction from their benefit payment, although this can rise to between 10% and 15% for rent arrears. Claimants of other benefits like income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), and Income Support might also experience a weekly cut of £4.55 per debt.
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The DWP usually approves third-party deductions at the request of an organisation to which money is owed after other recovery methods have failed. Advice from the Government department explains: “You’ll be told how much will be deducted by letter or in your Universal Credit journal.”
According to the Mirror, it also adds: “If you want to pay more than the fixed rate towards your debts, you must arrange this with the organisation you owe money to.”
Brits struggling with ‘fuel debt’—the money owed for gas and electricity—can also refer to the process as Fuel Direct when setting up deductions to cover their energy use. The DWP advises: “Contact your supplier to set up deductions for your ongoing bills. They’ll need your consent to request this for you. You can give consent on the phone. It does not need to be in writing.
“Agree an amount with them that covers the cost of the energy you use. You can stop deductions for ongoing bills at any time. Contact the office that pays your benefit to request this. If you choose to stop making gas and electricity payments, contact your energy supplier to arrange a different way to pay.
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“If you want to change the amount you pay, contact your supplier. If you owe money but cannot afford more deductions to your benefits, your supplier can tell you what help is available for people on low incomes. They may be able to arrange a different way for you to pay.”
In cases where Brits disagree with the deductions made from their benefits, they are entitled to ask for a mandatory reconsideration. The DWP specifies that such requests need to be lodged within one month of the decision, along with a ‘good reason’ for the dispute.
This may include the following instances:
- You disagree with the reasons for the decision
- You want to have the decision reviewed again
- You believe there is an error or missed evidence in the decision made
“Some decisions cannot be reconsidered. Others can go straight to an appeal,” the DWP adds. “Your original decision letter will say if this applies to you.”
For further information, head to the DWP’s website.